With Sensex down over 3% since Sep 23, banking crisis may prevent bull run

Stock bulls betting on a second rally from India’s landmark corporate tax cut are having their faith tested by a shadow banking crisis.

The Sensex index has fallen more than 3 per cent since reaching a two-month high on Sept. 23. That has erased almost half of the surge sparked by the Sept. 20 announcement of a landmark corporate tax cut, as debt concerns emerge at lenders including Indiabulls Housing Finance Ltd. and a co-operative bank.

“What happened over the last week or so is renewed concerns around banking system with issues about stability,” said Gautam Chhaochharia, a strategist at